SOURCE: Cape Bancorp, Inc.

Cape Bancorp, Inc.

February 15, 2011 17:52 ET

Cape Bancorp, Inc. Reports Fourth Quarter and Annual 2010 Results

CAPE MAY COURT HOUSE, NJ--(Marketwire - February 15, 2011) - Cape Bancorp, Inc. ("Cape Bancorp" or the "Company") (NASDAQ: CBNJ), the parent company of Cape Bank, announces its operating results for the quarter and year ended December 31, 2010.

For the quarter ended December 31, 2010, Cape Bancorp reported net income of $862,000, or $.07 per share, compared to net income of $1.2 million, or $.10 per share for the quarter ended December 31, 2009. The loan loss provision for the fourth quarter of 2010 totaled $2.8 million compared to $785,000 for the quarter ended December 31, 2009. During the fourth quarter of 2010, the Company recorded gains on the sales of securities of $523,000, compared to no gains recorded in the fourth quarter ended December 31, 2009. The fourth quarter of 2009 included an other-than-temporary-impairment (OTTI) charge of $292,000, compared to no such charge for the most recent quarter ended December 31, 2010. Loan related expenses were $515,000 for the quarter ended December 31, 2010 compared to $1.1 million for the same period of 2009. Although the net interest margin increased 10 basis points from 3.57% for the quarter ended December 31, 2009 to 3.67% for the quarter ended December 31, 2010, net interest income was basically flat quarter over quarter.

Net income for the year ended December 31, 2010 was $4.0 million, or $.33 per share, compared to a net loss of $17.9 million, or $1.45 per share for the year ended December 31, 2009. The $21.9 million year over year increase in net income is primarily attributable to reductions in the following expenses: $5.7 million in the loan loss provision, $1.7 million in OTTI charges, $973,000 in salaries and employee benefits, and $462,000 of Federal Deposit Insurance premiums. In addition, the year ended December 31, 2009 included a one-time $12.0 million tax expense related to the establishment of a deferred tax asset valuation allowance. Net interest income increased $225,000, or 0.63%, to $35.7 million for the year ended December 31, 2010 compared to $35.5 million for the year ended December 31, 2009 due, in part, to an increase in the net interest margin to 3.66% for the year ended December 31, 2010 from 3.54% for the year ended December 31, 2009.

At December 31, 2010, Cape Bancorp's total assets decreased $11.8 million, or 1.1% to $1.061 billion from $1.073 billion at December 31, 2009.

The Company's total net loans decreased to $772.3 million at December 31, 2010, from $789.5 million at December 31, 2009, a decrease of $17.2 million or 2.17%. This change is the net result of a decrease in commercial loans of $30.9 million, offset, in part, by growth in mortgage loans of $11.7 million and an increase in consumer loans of $1.3 million. The allowance for loan losses declined $773,000 from $13.3 million at December 31, 2009 to $12.5 million at December 31, 2010.

Delinquent loans increased $248,000 to $34.7 million, or 4.4% of total gross loans at December 31, 2010 from $34.4 million or 4.3% of total gross loans at December 31, 2009. At December 31, 2010, the Company had $43.5 million in non-performing loans or 5.54% of total gross loans, an increase of $10.3 million from $33.2 million, or 4.14% of total gross loans, at December 31, 2009. This increase results from the inclusion in non-performing loans of $11.8 million in troubled debt restructurings that were performing in accordance with their repayment terms at December 31, 2010.

At December 31, 2010, Cape Bancorp's allowance for loan losses decreased to $12.5 million from $13.3 million at December 31, 2009, a decrease of $773,000 or 5.81%. The allowance for loan loss ratio decreased to 1.60% of gross loans at December 31, 2010 from 1.66% of gross loans at December 31, 2009. The allowance for loan losses to non-performing loan coverage ratio decreased to 28.84% at December 31, 2010 from 40.04% at December 31, 2009 primarily due to the classification of the $11.8 million in troubled debt restructurings as non-performing loans. Charge-offs for the year ended December 31, 2010 were $8.8 million compared to $11.7 million for the year ended December 31, 2009. Loan loss recoveries totaled $588,000 for the year ended December 31, 2010, compared to $568,000 for the year ended December 31, 2009.

Other real estate owned (OREO) decreased $1.5 million from $4.8 million at December 31, 2009 to $3.3 million at December 31, 2010, consisting at December 31, 2010 of eight commercial properties and three residential properties. During the quarter ended December 31, 2010, one commercial property was placed into OREO at a value of $83,000. In addition, one residential property and three commercial properties with carrying values of $46,000 and $800,000, respectively, were sold during the quarter ended December 31, 2010 with a recognized net gain of $16,000.

Cape Bancorp's total investment securities portfolio increased $4.6 million, or 3.00%, to $157.4 million at December 31, 2010, from $152.8 million at December 31, 2009.

At December 31, 2010, Cape Bancorp's total deposits increased $16.5 million, or 2.24% to $753.1 million from $736.6 million at December 31, 2009. The Company's total borrowings decreased to $169.6 million at December 31, 2010 from $204.0 million at December 31, 2009, a decrease of $34.3 million, or 16.84%.

Cape Bancorp's total equity increased to $132.1 million at December 31, 2010 from $126.5 million at December 31, 2009, an increase of $5.6 million or 4.43%. The increase in equity was primarily attributable to the net income of $4.0 million and a decrease in accumulated other comprehensive loss, net of tax of $1.1 million. Cape Bank continued to maintain its well capitalized status for regulatory purposes.

Michael D. Devlin, President and Chief Executive Officer of Cape Bancorp and Cape Bank, provided the following statement:

"We were pleased by the Bank's performance in 2010 -- a sharp reversal from the losses of the prior year. Other positive developments include a stabilizing national economy which we anticipate will continue in 2011. The local economy appears to show some signs of recovery and we expect to see modest improvement in loan demand throughout the year. Meanwhile, the core business of the bank is operating well, with a stable NIM and growth in low cost deposits.

"While troubled assets continue to be significant, we have established exit strategies which will be instrumental in their long term resolution. It is worth noting that management is forecasting a gradual, rather than dramatic decline in troubled assets throughout 2011. The allowance taken in 2009 on deferred tax assets is also a significant item and one that has management's focus as we reassess the realizability of the deferred tax asset valuation allowance depending on sustained profitability.

"Management is optimistic about the prospects for Cape's future with an improving local economy, a solid core business, and the potential for loan growth in 2011."

                            Cape Bancorp, Inc.

                  Twelve Months Ended           Three Months Ended
                ----------------------  ----------------------------------
                 December    December    December   September    December
                 31, 2010    31, 2009     31,2010    30, 2010    31, 2009
                ----------  ----------  ----------  ----------  ----------
Statements of
 Income Data:
Interest income $   50,269  $   54,533  $   12,220  $   12,655  $   13,189
Interest
 expense            14,539      19,028       3,277       3,558       4,260
                ----------  ----------  ----------  ----------  ----------
   Net interest
    income          35,730      35,505       8,943       9,097       8,929
Provision for
 loan losses         7,496      13,159       2,844       2,700         785
                ----------  ----------  ----------  ----------  ----------
   Net interest
    income after
    provision for
    loan losses     28,234      22,346       6,099       6,397       8,144
Non-interest
 income              2,851         932       1,886       1,388         908
Non-interest
 expense            28,534      29,168       7,123       6,899       7,822
                ----------  ----------  ----------  ----------  ----------
Income (loss)
 before income
 taxes               2,551      (5,890)        862         886       1,230
Income tax
 expense
 (benefit)          (1,490)     12,011           -        (959)          -
                ----------  ----------  ----------  ----------  ----------
Net income
 (loss)         $    4,041  $  (17,901) $      862  $    1,845  $    1,230
                ==========  ==========  ==========  ==========  ==========

Basic Earnings
 (loss) per
 share(1)       $     0.33 ($     1.45) $     0.07  $     0.15  $     0.10
                ==========  ==========  ==========  ==========  ==========
Basic Average
 shares
 outstanding    12,351,902  12,312,714  12,360,688  12,358,140  12,328,321
                ==========  ==========  ==========  ==========  ==========
Diluted Earnings
 (loss) per
 share(1)       $     0.33 ($     1.45) $     0.07  $     0.15  $     0.10
                ==========  ==========  ==========  ==========  ==========
Diluted Average
 shares
 outstanding    12,354,952  12,312,714  12,362,065  12,368,865  12,328,321
                ==========  ==========  ==========  ==========  ==========
Shares
 outstanding    13,313,521  13,313,521  13,313,521  13,313,521  13,313,521
                ==========  ==========  ==========  ==========  ==========

Statements of
 Condition Data
 (Period End):
Investments     $  157,407  $  152,815  $  157,407  $  158,106  $  152,815
Loans, net of
 allowance      $  772,318  $  789,473  $  772,318  $  758,145  $  789,473
Allowance for
 loan losses    $   12,538  $   13,311  $   12,538  $   12,621  $   13,311
Total assets    $1,061,042  $1,072,821  $1,061,042  $1,054,218  $1,072,821
Total deposits  $  753,068  $  736,587  $  753,068  $  752,095  $  736,587
Total
 borrowings     $  169,637  $  203,981  $  169,637  $  162,335  $  203,981
Total equity    $  132,154  $  126,548  $  132,154  $  133,410  $  126,548

Statements of
 Condition Data
 (Average Balance):
Total interest-
 earning assets $  977,041  $1,004,376  $  967,580  $  970,146  $  991,773
Total interest-
 bearing
 liabilities    $  859,576  $  880,152  $  845,267  $  847,419  $  870,796

Operating Ratios:
ROAA                  0.38%      -1.64%       0.33%       0.69%       0.46%
ROAE                  3.06%     -12.89%       2.55%       5.56%       3.89%
Yield on
 Earning Assets       5.15%       5.43%       5.01%       5.18%       5.28%
Cost of Interest
 Bearing
 Liabilities          1.69%       2.16%       1.54%       1.67%       1.94%
Net interest
 margin               3.66%       3.54%       3.67%       3.72%       3.57%
Efficiency ratio     68.59%      69.19%      67.56%      64.80%      77.23%

Capital Ratios:
Tier 1 Leverage
 Ratio                9.96%       9.37%       9.96%       9.81%       9.37%
Tier 1
 Risk-Based
 Capital Ratio       12.65%      11.45%      12.65%      12.32%      11.45%
Total
 Risk-Based
 Capital Ratio       13.90%      12.71%      13.90%      13.57%      12.71%
Tangible equity/
 tangible assets     10.51%       9.85%      10.51%      10.70%       9.85%
Book value      $     9.93  $     9.51  $     9.93  $    10.02  $     9.51
Tangible book
 value          $     8.20  $     7.76  $     8.20  $     8.29  $     7.76
Stock price     $     8.50  $     6.72  $     8.50  $     7.60  $     6.72
Price to book
 value               85.60%      70.66%      85.60%      75.85%      70.66%
Price to
 tangible book
 value              103.66%      86.60%     103.66%      91.68%      86.60%

Quality Ratios:
Non-performing
 loans to total
 gross loans          5.54%       4.14%       5.54%       4.27%       4.14%
Non-performing
 assets to
 total assets         4.41%       3.55%       4.41%       3.57%       3.57%
Texas ratio(2)       38.46%      32.62%      38.46%      30.59%      32.62%
Allowance for
 loan losses to
 non-performing
 loans               28.84%      40.04%      28.84%      38.32%      40.04%
Allowance for
 loan losses to
 total gross
 loans                1.60%       1.66%       1.60%       1.64%       1.66%
Net charge-offs
 to average
 loans                1.05%       1.37%       1.50%       1.01%       0.62%

(1) Earnings Per Share calculations use average outstanding shares which
    include earned ESOP shares.
(2) Texas Ratio (NPAs/Tangible Equity + ALLL)



Period Ending:                                     12/31/2010
                                     -------------------------------------
                                       Balances  % total loans   # Loans
31-59                                  2,265,160         0.29%           8
60-89                                    689,926         0.09%          11
90+                                   31,710,306         4.04%         114
                                     -----------
Delinquent                            34,665,392         4.42%
Non-Accrual Other                     11,755,732         1.50%           7
                                     -----------  -----------  -----------
Total Delinquent and Non-accrual:     46,421,124         5.91%         140
                                     -----------               -----------
Total Loans Total:                                784,855,593


Days                                      CML           IL           ML
31-59                                  1,304,990      163,624      796,546
60-89                                     93,327      119,376      477,223
90+                                   26,259,908      795,170    4,655,228
                                     -----------  -----------  -----------
Delinquent                            27,658,225
Non-Accrual Other*                    11,755,732
                                     -----------  -----------  -----------

Total Delinquency and non-accrual by
 Type                                 39,413,957    1,078,170    5,928,997
Loan Balance by Type                 475,459,224   50,183,488  259,212,881
% of Total Loans in Type                    8.29%        2.15%        2.29%
Total Delinquency                                  46,421,124


Period Ending:                                     9/30/2010
                                     -------------------------------------
                                       Balances  % total loans   # Loans
31-59                                  4,045,130         0.52%          19
60-89                                  4,878,337         0.63%          13
90+                                   32,082,274         4.16%         111
                                     -----------
Delinquent                            41,005,741         5.32%
Non-Accrual Other                        853,044         0.11%           3
                                     -----------  -----------  -----------
Total Delinquent and Non-accrual:     41,858,785         5.43%         146
                                     -----------               -----------
Total Loans Total:                                770,766,317


Days                                      CML           IL           ML
31-59                                  2,186,269      497,455    1,361,406
60-89                                  4,279,793       48,176      550,368
90+                                   26,718,877      795,170    4,568,227
                                     -----------  -----------  -----------
Delinquent                            33,184,939
Non-Accrual Other*                       853,044
                                     -----------  -----------  -----------
Total Delinquency and non-accrual by
 Type                                 34,037,983    1,340,801    6,480,001
Loan Balance by Type                 481,080,792   49,495,762  240,189,763
% of Total Loans in Type                    7.08%        2.71%        2.70%
Total Delinquency                                  41,858,785



Period Ending:                                     12/31/2009
                                     -------------------------------------
                                       Balances  % total loans   # Loans
31-59                                  3,205,196         0.40%          20
60-89                                  2,503,662         0.31%          11
90+                                   28,707,813         3.58%          86
                                     -----------
Delinquent                            34,416,671         4.29%
Non-Accrual Other                      4,540,114         0.57%          10
                                     -----------  -----------  -----------
Total Delinquent and Non-accrual:     38,956,785         4.85%         127
                                     -----------               -----------
Total Loans Total:                                802,783,902


Days                                      CML           IL           ML
31-59                                    913,278      408,681    1,883,237
60-89                                    903,146       49,911    1,550,604
90+                                   24,975,069      482,137    3,250,608
                                     -----------               -----------
Delinquent                            26,791,493
Non-Accrual Other*                     4,540,114
                                     -----------  -----------  -----------
Total Delinquency and non-accrual by
 Type                                 31,331,607      940,729    6,684,449
Loan Balance by Type                 506,364,068   48,879,352  247,540,482
% of Total Loans in Type                    6.19%        1.92%        2.70%
Total Delinquency                                  38,956,785

    *Non-Accrual Other means loans that are less than 90 days past due
            that are classified by management as non-performing
                  and are accounted for on a cash basis

Forward-Looking Statements

This press release discusses primarily historical information. However, certain statements contained herein are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks, as described in our SEC filings, and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operated, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions, which may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Further information on factors that could affect Cape Bancorp's financial results can be found in the filings listed below with the Securities and Exchange Commission.

                                                           Date filed with
                SEC Form           Reported Period               SEC
                --------  -------------------------------- ----------------
                  10K         Year ended December 31, 2009   March 16, 2010
                --------  -------------------------------- ----------------
                  10Q         Quarter ended March 31, 2010      May 7, 2010
                --------  -------------------------------- ----------------
                  10Q          Quarter ended June 30, 2010   August 3, 2010
                --------  -------------------------------- ----------------
                  10Q     Quarter ended September 30, 2010 November 2, 2010
                --------  -------------------------------- ----------------

Contact Information

  • For further information contact:
    Michael D. Devlin
    President and Chief Executive Officer
    or
    Guy Hackney
    Chief Financial Officer
    Cape Bancorp
    (609) 465-5600